Posted on: 10th Apr, 2004 04:59 am
Absolute auction is a type of auction in which the assigned property is sold to the highest bidder irrespective of its price.
The assigned property for absolute auction is marketed by Auction department through several services and no fees are charged for providing the services. Services provided by the auction department are:
For example, In a real estate auction whose value is $400,000. Jennifer offered a price of $700,000. Since, no one else offered a higher price than $700,000, the house was sold to Jennifer. This type of an auction is known as 'absolute auction'.
The assigned property for absolute auction is marketed by Auction department through several services and no fees are charged for providing the services. Services provided by the auction department are:
- Brochures.
- Direct Mail.
- Internet Exposure.
- State Wide Multiple Listing.
- Classified Advertising.
- Local and Regional Newspaper Advertising.
- Business and Investor Newspaper Advertising.
- Company Wide Auction Announcements.
- Auction Signs.
- Customer Service.
- Graphics Design.
- Broker Flyer Distribution.
- Twenty-Four Hour Voice Mail Request Line.
- Auction Staff.
For example, In a real estate auction whose value is $400,000. Jennifer offered a price of $700,000. Since, no one else offered a higher price than $700,000, the house was sold to Jennifer. This type of an auction is known as 'absolute auction'.
Is absolute auction the only method which can be used or there are other methods also available?
Hi Brigitte,
Welcome to Mortgagefit forum.
There are two other methods available which are known as the Minimum Bid Auction and the Reserve Auction.
In the Minimum Bid Auction,
Welcome to Mortgagefit forum.
There are two other methods available which are known as the Minimum Bid Auction and the Reserve Auction.
In the Minimum Bid Auction,
- There is a minimum price which is published and the bid which is equal to or more than that price is accepted by the auctioneer. The lowest price which will be accepted is announced at the time of auction and is always mentioned in the advertisements & brochure.
- It reduces the risk for the seller because the price which he will get will always be more than a certain minimum level.
- Seller has the right to predetermine the sale price and reserves right of acceptance or rejection of the amount of highest bid within a specified time frame. This time frame can be immediately after the auction or up to seventy two hours after the conclusion of the auction.
- The disadvantage of reserve auction is that a buyer remains uncertain about buying the property even after placing the highest bid.